Learn Practice Implement Challenge

 

Here at the Erwood Group, we’ve created a new exercise methodology. A new paradigm for the way a business exercises, trains, and prepares for a crisis. It is called Learn, Practice, Implement, Challenge™ – The new exercise methodology to Increase Your business endurance. 

I’m sure you’ve heard the phrase “crawl, walk, run” before, right?

Now, go ahead and tell me what you mean by that exactly, and I bet you’ll have some trouble.

“Crawl, walk, run”is a phrase I commonly hear especially around exercises. It’s a phrase that I hate. It’s just too vague, overly simplified, and completely nondescriptive, leaving out key details about just how we are supposed to progress through to something bigger and better. Can you tell me what you’re supposed to be trying to achieve?

Of course, you can’t.

That’s why many years ago I came up with the phrase Learn, Practice, Implement, Challenge™ which provides not only the descriptive details but the overarching goal of what we’re trying to accomplish with each stage of our exercise progression.

First and foremost, we have our Learning stage:

Learn

Sounds simple enough. At this stage, we teach our new plan owners and participants what they should be doing. Learning. It is designed to get everyone in the same place. As a team. They learn they have a plan, what is in the plan, where to find the plan, how to update and maintain the plan (and who is responsible for that maintenance), and we go through the plan, especially the strategy section and steps based on the strategies.

At this point we walk the participants through each strategy, asking questions about the strategy validity, any potential for this not to work, dependencies required for the strategy to work, and any additional strategies or sub-strategies we can add.

Next, we walk through each step required to implement the strategies. Making sure details needed are captured and not left too vague makes the information impractical at best and unimplementable during a crisis at worst. For instance, if a recovery strategy calls out the reliance on a secondary vendor that vendor should be called out by name. And then tertiary vendors and so on. Think in terms of, if someone else other than my main team members had to implement this plan, what information would they need? 

At the end of this exercise, we still conduct an after-action review and collect all the appropriate data such as lessons learned, what went well, what worked, what didn’t and how can we improve. We’ll also ask if they would like to add any additional input and what kinds of other disruptive events have, they experienced in the past. All of this is done to create familiarity and training for future exercises as well. The entire process is about having the participants learn new skills and improving their current existing plans. 

Once these learning stage exercises are conducted and the plans updated to reflect the exercise outcomes and additional strategies the work begins to set up the next round of future exercises for the practice stage.

Practice

Usually taking place about a year after the learning stage, the practice phase starts to get a little bit more intense. Still, in a tabletop setting in most cases, the participants are expected to know how to access their business continuity plans, how to access information within the plan, and how to walk through the steps to invoke the plan successfully. This is usually done and presented as part of a scenario impacting the business and forcing the plans to be activated.

At this practice stage, the idea isn’t to do anything too hard but to present the exercise, have the team attempt to achieve a predetermined set of goals, and even guide them into the next steps through a series of questions or injects. They may do so exceedingly well or may fail and learn a series of lessons. The idea though is to allow them to practice their plan in a controlled environment where they can feel safe and make mistakes. But not to push them to the brink where it becomes a stressful overwhelming event where they learn nothing and feel defeated.

In some cases, it may be necessary to hold several practice sessions with the team before moving on to the next stage of maturity in the exercise progression. Perhaps twice a year or more. More on this later in another post. 

The point is some teams will need to practice a few times before their comfort and confidence levels allow them to move onto the implementation stage. As with the learning stage, we hold an after-action review session immediately following each exercise.

Implement

Next, will be to implement the plans during an exercise. Here we start with what is the overall purpose of the exercise, as in, what are we exercising? Are we testing the ability to send notifications? Implement strategies? Can the steps be followed that are needed to initiate and complete the strategy? Can vendors be notified and coordinated with? Can customers be notified and coordinated with as expected? Can key personnel go to and work from an alternate location or remotely?

For all these implementations and more, are they successful? Did they fail? If so, why? Can the cause of the failure be easily determined? What worked well? What didn’t? Where is there room for improvement? How were internal communications? Were there errors? What were they? Did we use alternate applications to access information? How did that go? Are we tracking things manually? Did it work effectively? Where are there stumbling blocks and bottlenecks?

So, to summarize this section, Implementation exercises are exactly that, implementation of parts of the plan such as a select strategy, communications internally or externally, notifications to team members or other teams, or the implementation of the whole or parts of the plan that would be needed to fit the scenario.

Once teams have had the opportunity to implement their plans, we will start to Challenge them.

Challenge

The challenge phase is exactly what it sounds like, we create a scenario or series of scenarios that begin to challenge the plan owners and participants. This is done to expand the teams’ capabilities, build massive confidence, and the capability to learn and improvise based on what they know and the strategies available to them within the plan.

This challenge phase is never done with the idea of forcing the team to the brink and forcing failure, but to provide a safe learning environment to expand their capabilities. In other words, don’t make it so impossible that they do fail, but challenging enough that it forces them to think, act, and improve upon what is there so they can be ready for real incidents should they arise. Put another way, the challenge level exercises should elevate the team involved and make them better for participating in the exercise.

I’ve seen some exercise designers and facilitators develop exercises where they knock-off (kill) many or all key personnel, make it impossible to contact vendors, and inject failure at every turn. Not that some of these things can’t happen. They do. But the idea is to provide a positive learning experience for the people involved.

If they aren’t learning at every stage or phase along the way and are just placed in a stressful situation where failure is the only or main outcome, they will walk away unhappy, discouraged, with less confidence, and less likely to look forward to or participate in another exercise.

In fact, if this has been the case, you may need to reinitiate the exercises at the learn or practice phase level again just to build up your team. 

So, get out there, and Learn, Practice, Implement, and Challenge your business continuity, disaster recovery, and crisis management teams.

As part of our challenge phase as businesses mature in the exercise phase to improve their preparedness, we offer world-class training and exercise to take their endurance to the next level. We have partnered with an academy award-winning special effects team to create real-world events and scenarios in a safe and controlled environment.

 

Keith Erwood is the COO, Co-Founder, and Principal Managing Consultant of the Erwood Group. The Erwood Group focuses on business preparedness, business continuity, disaster recovery, and crisis management. We create enduring businesses that Prepare, Prevent, Profit through planning, mitigation and exercising. #Endurance>Resilience

Are You Up to the Challenge?

 

Over the past few years, business leaders have been reminded repeatedly of the unpredictability of doing business in an uncertain future. This has certainly been the case for the past two years as business owners faced devastation from both humanitarian and natural disasters.   

As the world gets riskier, being prepared for disruptions and disasters impacting your business is extremely important. Why? In addition to preventing severe financial losses, it can prevent companies from “closing their doors”.   

To celebrate April’s Financial Literacy Month, I will share examples of what happens when you do not have a plan and outline strategic steps on how to build a resilient organization during the next crisis.  

NOT PLANNING FOR THE UNEXPECTED 

Even seemingly small events can have major impacts on a business. Consider the following events causing major impacts to businesses:  

  • A car hit a fire hydrant in front of an antique bookstore causing damage to 1,500 antique books costing $300,000 in restoration and repairs. 
  • A bad database upgrade and upload resulted in the database transaction processing idled for seven days; resulting in the loss of two major clients.  
  • Even a trader was impacted by a power loss at his home.  Due to the outage, he was unable to execute a trade to exit a position and lost $70,000.00 in a single day.  

Tessco Technologies 

Let’s look at what happened with Tessco Technologies, a supplier of wireless communications products for network infrastructure, site support, and fixed and mobile broadband located in Baltimore, Maryland.  The business was not in a flood, fire, or earthquake zone.  In this case, the culprit was a faulty fire hydrant, which caused several hundred thousand gallons of water to be blasted through a concrete wall leaving the company’s primary data center under several feet of water.  It also left 1400 hard drives, and 400 SAN disks soaking wet and caked with mud and debris. 

PREPARE, PREVENT, PROFIT

Businesses don’t need to be located in a disaster zone to be impacted by a disaster.  The key to protecting your business is to prepare with a plan that is well documented and has strategies you can rapidly put into place.  

Below are five reasons why business leaders should prepare: 

  • Quickly respond and adjust to a disaster or disruption with strategies that allow you to shift and pivot your business for a more expedient recovery 
  • Reduce or even eliminate financial losses by implementing strategies that reduce the impacts 
  • Obtain better insurance rates and coverage for instant Return on Investment (RIO) 
  • Meet government, regulatory, and customer requirements calling for contingencies 
  • Maintain business reputation and share price 

A well-documented plan can help you quickly respond, adjust, and pivot to alternative strategies. As part of proper planning, it is important to know what the delayed and lost revenue to your business will be as well as the potential for increased expenses and other recovery-based costs that will impact your business.  

The first step is to calculate what your downtime costs would be. This is usually directly representative of lost revenue. It is important to note that even delayed revenue can have a significant impact on a business’ cash flow, whether daily, weekly, or monthly. Even if all your income is only delayed, having a reduction to cash flow can shut a business down quickly.  

By taking the time to do even basic downtime calculations you can begin to take steps to protect your revenue-generating processes. 

ASSESSING THE FINANCIAL IMPACTS OF BUSINESS DISRUPTIONS 

Many organizations skip the Financial Impact Analysis.  This is a mistake. Conducting a Financial Impact Analysis is critical to helping a business understand the actual financial impact a disaster or disruption can have on a business. With this process, businesses can select strategies to enable a recovery that makes sense financially and gives leaders peace of mind that no matter what uncertainties the future may bring, organizations will thrive and even profit for years to come.  Let’s take a look at the top five: 

  • Providing insight into Business processes and Applications that when impacted by disruption will cause the business to have lost or delayed revenues 

This first step will allow a business to determine estimated or in some cases exact dollar amounts in lost and delayed revenue from a disruption. Even a basic calculation of these lost revenues can quickly inform a business where they can and should focus their preparedness efforts. Notice this is preparedness, not recovery efforts. This is because a large part of getting this right is done during the preparedness phase pre-disaster.  

  • Allows for proper cost-benefit-analysis of (to implement) right-sized recovery strategies 

This calculation then allows the business to focus its strategies on key critical core functions that are most likely to be impacted by revenue losses and cash flow issues. This deeper insight helps the business to focus resources, time, and money on these critical functions with better data backup, record retention, and manual recovery strategies rather than through resources in business areas randomly that may not need as much or any strategies.  

  • Potentially reduced insurance premiums along with increased insurance coverage 

Additionally, presenting your insurance company with a well-thought-out preparedness plan in many cases can reduce your insurance coverage premiums, provide you with increased coverage, or both. Just recently I helped a large Biotechnology company obtain an additional $500M in coverage for a total of $2B in total Property and Casualty Insurance Coverage with zero additional increase to their premiums.  

  • Better insight for the selection of Recovery Time Objectives (RTOs), Recovery Point Objectives (RPOs), and Maximum Allowable Downtime (MAD) 

Another key benefit is rather than selecting arbitrary Recovery Time Objectives (RTOs) for your business processes or Information Technology Disaster Recovery (ITDR), you can tie these to your financial impacts and set clear goals that are meaningful to your business.  

This would allow you to implement a preparedness or IT recovery strategy that enables you to recover in the time you need and more importantly, save money. 

  • Greater ability to measure effective Return on Investment (ROI) of Business Preparedness Measures 

When you take the time to do even basic financial impact calculations, it also becomes much easier to measure and obtain better ROI. Yet, many do not take the time to do these calculations because they believe it is too difficult, they don’t know where to start, or even how to apply the outcome of these calculations.  

MAKE YOUR BUSINESS MORE RESILIENT  

At the Erwood Group, our business is helping your business stay up and running after and ideally during a crisis or disruption. Whether you need help with business continuity planning, crisis, and incident management, or need better disaster recovery options, we’ve got programs and services to make your business more resilient so that you can prepare, prevent and profit even in a disaster.  

To celebrate April’s Financial Literacy Awareness month, I am offering a free consultation to help your business survive the next disaster and provide critical strategic steps to prepare, prevent and profit in an uncertain and unpredictable future.   

Contact Keith Erwood, Business Preparedness Expert, ERWOOD GROUP. 

Supply Chain Disruption Forcing San Diego Businesses to Make Tough Decision this Holiday Season

Local Crisis Management Expert Believes Distributions Challenges Are an Opportunity, Not a Crisis.

The Halloween decorations have been put away and we are now entering the holiday shopping season. Sticker shock will be this year’s theme, if you can find what your looking for that is. 

SAN DIEGO—The global supply chain crisis, which includes thousands of unloaded containers with merchandise lingering on ships in major US ports, coupled with skyrocketing gasoline prices, a worker shortage, and a huge increase in consumer demand, is forcing local companies to make some tough decisions heading into the competitive holiday season.   

According to Crisis Management and Business Continuity Expert, Keith Erwood, Business Preparedness Expert of ERWOOD GROUP, companies must decide three important questions:  will they pay higher prices upfront to receive overseas goods, pass the increased costs onto their customers, or retreat from overseas markets, all together.

Keith Erwood: “Our data and research indicate, things will get worse before they get better.   However, the supply chain disruption should be viewed as an opportunity, not a crisis, for our San Diego business owners. There are steps companies can make to ensure resiliency and identify key strategies you can take to build a stronger supply chain.’

To help local businesses survive this holiday season, Crisis Management Expert, Keith Erwood, Business Preparedness Expert of ERWOOD GROUP has outlined strategic steps to handle the supply chain disruption:

Diversity of Supply Base

To help untangle the global supply chain mess, businesses need to move away from depending on a single supplier overseas, like China or Vietnam and find local suppliers where possible to fill critical components or materials. This is because local suppliers can deliver products much quicker. It is also easier for a supplier to coordinate a shipment across the neighborhood than around the world.

Forecast Demand

Companies need to focus on delivering quality best-selling products to their consumer-base, instead of trying to keep shelves packed with non-essential slow-moving items.

Erwood said, “There is a false narrative being shared in the media right now that holding and buying increased inventory will allow businesses to meet high demand over the holidays.  This is a mistake.  If demand for a product decreases, deep inventory can become a financial liability and environmental waste.  This is especially true for technology, fashion, and perishable products that rapidly lose value and salability over time.”

Be Honest

Research and data at the ERWOOD GROUP predict supply chain imbalances will continue into June 2022, due to inflation, workers shortage, and the impact of the Delta variant around the world—especially in South Asia.

Erwood said, “For this reason, you must be very honest with your customer, even when it hurts. 

Plan for Recovery

Companies should think beyond short-term disruption to long-term company survival. Disruption can be seen as an opportunity to thrive and make tough business decisions, like a long-desired reorganization or cutting non-performing products and customers.

Buy Local

It’s no secret supply chain issues have taken a toll on small businesses importing materials.  For this reason, San Diego consumers must start buying from local businesses to change how they operate. By relying less on goods and services from outside markets you can boost regional and local economies.

GUEST BOOKING:

Keith Erwood is available for live guest segments. To schedule your interview, please contact, Kristi Angevine, Publicist, ERWOOD GROUP at kangevine@gmail.com

 

About ERWOOD GROUP

At the Erwood Group, our business is helping your business stay up and running after and ideally during a crisis or disruption.  Whether you need help with business continuity planning, crisis, and incident management, or need better disaster recovery options, we’ve got programs and services to make your business more resilient so that you can prepare, prevent and profit even in a disaster. For more information visit erwoodgroup.com